New Zealands Pragmatic Political Approach Welcome

The era of nine years of interventionist style government , led
by the Labour Party in coalition came to a close in New
Zealand 8 November last year and was replaced with centre
right parties led by the dominant and pragmatic National
Party.

The nine year spell of the interventionist style
Labour led Government , was really a backlash to the often
traumatic and ideologically driven reforms of the Labour and
National Governments during the second part of the 1980’s
and early 1990’s – following the collapse of the New
Zealand economy in 1984, under the leadership of Sir Robert
Muldoon and his interventionist National Government.

While
the reforms of the 1980’s and early 1990’s were
essential – the political rhetoric through this era was
heavily ideological – which was in many ways the
continuance of a tradition from the time of Premier Richard John Seddon (1893 –
1906), a rough Yorkshire man, who through the sheer force of
his personality, started New Zealand on the path of
“social reforms”. He often referred to New Zealand as
“Gods Own Country”. At that time – New Zealand had the
highest gdp per capita in the world.
Today it ranks (on a PPP basis) at around 45th with Australia at
27th.

Due to the too often highly ideologically
charged nature of New Zealand politics to date – what this
meant was that as one “ideological tribe’ gained power -
it ignored and talked over the top of the other
‘tribe”.

While right wing think tanks in America, for
example, talked in glowing terms about the “reforms of the
80’s” – most New Zealanders were not enjoying the
experience quite as much –and many overseas visitors to
this country, were often baffled as to why the political
discourse here was so ideological.

New Zealanders by
nature could not be described as “ideological” – and
are generally tolerant, easy going, with an adaptable “can
do” attitude. It has been a case of the “elite
extremists” at both end of the political spectrum, too
often dominating the political discourse. The “power of
the internet” is the major reason why the “extremist
elites” are no longer an issue.

“We used to say we were
egalitarian, one of the most egalitarian societies in the
world, by which we did not mean that we were all equal, but
that we all equally had a place and we could make something
of ourselves. Too many people now do not have that sense of
a place. We are not egalitarian, at least not in the way we
were.”

“There are two principal ways to think
about this new inequality. We can think of it as an ethical
issue; we can say it is wrong that some people should be
handicapped from living a full human life while others have
a great start in life and confidence. That contravenes the
principal of a fair go, which use to be a core belief in
this country. Alternatively we can think of this new
inequality as an economic issue. We will all be the richer
if everyone can play a full part in the economy.”

It
would appear that New Zealand is now entering a new era of
pragmatic centre right government – with a strong
commitment to work constructively across the political
spectrum.

In large measure this is due to John Keys
leadership of the dominant centre right National Party.

At
just 47, Key has been extremely successful in the commercial
world and seems to be developing considerable political
skills, with a particular ability of communicating
effectively across the political spectrum. The last New
Zealand general election was really about whether or not Key
“had what it took” for the role of Prime Minister.
Voters overwhelmingly supported him and his National Party
– and a coalition government with ACT, the Maori Party and
United Future was quickly put in place.

Recently Mary
Kissel of the Wall Street Journal – Asia - interviewed New
Zealand Prime Minister John Key, where he outlined the
general approach the New Zealand Government will be taking
going forward, within “You cant spend your way out of the
crisis”. For example –

“ ‘We don’t tell
New Zealanders we can stop the recession, because we
can’t’ says Prime Minister John Key, leaning forward in
his armchair at his office at the Beehive, the executive
wing of New Zealand’s parliament. ‘What we do tell them
is that we can use this time to transform the economy to
make us stronger so that when the world starts growing again
we can be running faster than other countries we compete
with’ “.

“That idea – growing a nation out
of recession by improving productivity – puts Mr Key and
his conservative National Party at odds with Washington,
Tokyo and Canberra. Those capitals are rolling out billions
of dollars in stimulus – with taxpayer money – to prop
up growth. ‘That’s risky’ Mr Key says ‘You’ve
saddled future generations with an enormous amount of debt
that then they have to repay,’ he explains. ‘There is
actually a limit to what governments can do’.

In Ms
Albrechtsens view – political leaders without “real
world commercial experience” are seriously handicapped.
She states –

“Pick the odd man out: Barack Obama,
Kevin Rudd, John Key. Only one of them, New Zealand’s
Prime Minister John Key, has any material personal
experience of how to make a dollar in the private
sector……………This is not to denigrate the public
service or community sectors. They do important work. But a
lifelong immersion in the public sector creates a government
focused cast of mind and blind spots about the private
sector.”

“I have been seeking economic common sense in
high places. It’s very difficult to find on either side of
the Atlantic………With the fiscal insanity virus rapidly
spreading the globe I had nearly given up hope of finding
common sense at a high level anywhere. Nonetheless I am
pleased to report that I found an amazing display of honest
to goodness common sense in New Zealand…….John Key, New
Zealand’s Prime Minister says you can’t spend your way
out of a crisis”.

Somewhat surprisingly – I
received a rather rapid response from the eminent financial
commentator Martin Wolf of the Financial Times with a “Oh
yes you can” – to which one can only say “When is the
Financial Times going to focus its attention on exploring
solutions to Britain’s land use regulatory shambles?”.
An “utter shambles”really and the disgrace of the
developed world as this recent article from The Independent
“The Englishman's castle in ruins”
illustrates.

The United Kingdom National Housing
Federation forecast for 2009 is that only 70,000 new
residential units will be put in place. Central figures
within the industry are even more pessimistic. Tony Pidgley,
the Berkshire Group Chief Executive, who is considered the
sectors great sage, believes that work will only start on
40,000 units this year.

If Mr Pidgley’s 40,000 unit
forecast comes to fruition – this means that the United
Kingdom with a population of 61 million, “build rate per
1000 population” will collapse to 0.65 units / 1000
population – the worst……..anywhere in the developed
world……….in recorded history……including through
the years of the Great Depression. Only the other “basket
case” - California – the epicenter of the global
financial crisis - comes close.

If other counties were
building at this low estimate (40,000 units annually) United
Kingdom rate – the United States annual residential build
would be 198,250: Canada 22,750; Australia 13,650 and New
Zealand and Ireland approximately 2,730 units annually
each.

Not surprisingly – and rather rapidly –
political leaders who mislead their publics in their
governments ability to “stimulate” an economy - and
worse still – the fiction that they are capable of re -
inflating their housing markets – are getting
appropriately punished by their constituents.

Around last
October UK Prime Minister Gordon Brown - engaging in
“splash economics” was seen as the “great savior”
– but in the space of a few short months - is clearly
heading for political oblivion. During a recent Washington
visit, President Obama “declined” the request for a
joint press conference with Mr Brown.

President Barack
Obama’s “honeymoon” seems to have lasted less than 50
days, if recent polling is any guide. Americans
are belatedly and with justification, becoming increasingly
concerned about the effectiveness of the stimulus packages.

Australian Prime Minister Kevin Rudd is slowly slipping in the polls – and
would likely have fallen further if the opposition Federal
Liberal Party was cohesive. Mr Rudd – with his Housing
Minister Tanya Plibersek lack of elementary commercial
knowledge - is illustrated by the recent release of what can
only be described as a “whitewash report” with respect
to Housing Supply. Other than Fig 1.1
Chapter 1 Introduction – illustrating how house prices
have moved since 1972 in relation to household income, rents
and construction costs – the rest of this report
deliberately avoids the real issues.

It appears
responsible people from the property industry may need to
sit down with Mr Rudd and Ms Plibersek –and explain to
them why Australian metro areas should be supplying serviced
fringe lots at between $A30,000 - $A50,000 and not the
stratospheric $A200,000 and beyond lots / sections prices
young Australians are being conned into buying (read closely
First-home grant to end | The
Australian) with taxpayer financed $A21,000 First Home
buyer grants – unnecessarily.

“The latest 3 News poll shows National sitting on
60 per cent support, the highest figure ever recorded in
that poll and, I suspect, any other survey. Even more
remarkable is that TV3’s poll usually skews favourably to
Labour. In this one the Opposition could only muster a
withering 27 per cent support.”

“Now here is
the really weird thing. Even people who don’t back
National approve of how it is handling the country. Sixty
percent of people might say they would vote National, but 64
per cent say its performance has been strong or very strong.
Only 4 per cent of those polled could claim the Government
has been weak.”

“It doesn’t get much better
than that. Well for John Key it does. The poll showed 52 per
cent of people preferred him as Prime Minister but a massive
85 per cent conceded him a capable leader. Seventy five per
cent thought he would be good in a crisis (and in case
it’s escaped your notice, we are in a crisis) while 77 per
cent backed his judgment.”

Following the Australian
Federal election in late 2007, Fitch Ratings was
commissioned by the Sydney Morning Herald to research why
voters switched to the new government – as Stuart
Washington explains within "Fear of losing homes drove Labour
win".

The clear message was that voters do not thank
politicians for loading them up with excessive debt and
making them poorer.

It’s would appear that Mr Key in New
Zealand has learnt that lesson – while Mr Rudd in
Australia and too many politicians elsewhere, have failed to
learn it – as yet.

In response to the challenges facing Scoop and the media industry we’ve instituted an Ethical Paywall to keep the news freely available to the public.
People who use Scoop for work need to be licensed through a ScoopPro subscription under this model, they also get access to exclusive news tools.

ALSO:

The warning follows an investigation into representations Spark made on its website and in emails in August and September 2018, notifying in-contract customers receiving its copper-based broadband service of its decision to increase the price by $5 a month. More>>

Artificial intelligence techniques can create massive volumes of fake audio, images and video that is incredibly convincing and near-impossible to detect... While it is tempting to respond with new law, the study finds that the long list of current legislation covering the issues may be sufficient. More>>